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Marital Debts

Sunday, March 23, 2008

Equity Loans
are very similar to mortgages. Usually they are loans secured by
something of value, traditionally a peice of real estate that is worth
more than the loan being taken out. A mortgage for an equity loan is
typically recorded and though it can be a first mortgage on the
property, it is often a second mortgage.

Equity
loans can also be extended upon other collateral of value, such as
bonds, stocks, valuable business equipment, jewelry and the like.

Fred
has been married to Rachel for 26 years. Over the years they have
accumulated a nice house along the water which is paid off. Fred has a
22 Foot Scooner that has a galley kitchen and sleeps six (6). Rachel
has four (4) collectible fur coats that she has kept in mint condition
and lots of diamond jewelry including necklaces, anklets, bracelets and
rings that she only wears for special occasions.

Fred
has kept the finances, but he hasn't done it very well and after he and
Rachel retire, he realizes they have no liquid cash coming in to
sustain their lifestyle.

Fred
panics as Rachel tells him she's going shopping at Carte Blanche.
Scrambling to figure out what to do Fred finds the deed to his schooner
and grabs the three most valuable peices of jewelry that he bought for
Rachel.

While
Rachel is gone Fred runs out and has the jewelry appraised and gets a
value assigned to his Scooner. Fred then runs down to Focus One Finance
and applies for a loan by pledging the equity in the jewelry and his
schooner. Focus One Finance holds the title to the schooner and records
a lienholder statement against it. Focus One Finance also holds the
jewelry and tell Fred that he'll get all of this back when he satisfies
his Equity Loan terms. Focus One Finance wires $85,000 to Fred's bank
just in time for Rachel to make a purchase with her MasterMoney Card.

Fred rushes back home feeling that he has put an end to the crisis.

Two
weeks later Fred gets his first Equity Loan Statement. He doesn't want
to pay it out of the monies he got so he puts it in a drawer. A month
later another statement comes with a double payment due and penalty
fees. Again Fred stuffs it in the drawer, not wanting to deal with it
at this time.

Finally
in the third month Fred knows he can't avoid this anymore, but rather
than pay the statement he waits until Rachel is out of the house and he
takes her two best fur coats and runs down to Focus One Financial. At
first Fred offers them as payment and tells Focus One that the fur
coats are worth much more than the payments due, but Focus One
Financial wants payment ...they do not want to barter. Financial Focus
One states that the best it can do is re-finance his loan and
capitalize the interest and penalties and hold the garments as
additional collateral since he did not make the first three payments.
Fred agrees and returns home.

A
week later Fred and Rachel are invited to a formal dinner event. Rachel
immediately notices that several of her best peices of jewelry are gone
and so are her fur coats. Rachel insists on calling the police but Fred
urges her to keep looking. After about an hour, Fred breaks down and
tells Rachel the whole story. Rachel is furious! She demands that he go
right down and get her furs and her jewelry back immediately. Fred goes
to Focus One Financial but they will not release the items until he
fulfills the Equity Loan. Fred checks the checkbook. There is only
$5,300 remaining in the account. Fred goes back and checks all the
entries and they are all purchases that Rachel made for herself.

Fred
returns to explain to Rachel why he can't get the items back. Rachel
quickly packs a suitcase, takes her debt card and their check book and
leaves.

The
next afternoon Fred is served with divorce papers. Fred goes down to
the bank to get some monies to hire an attorney. The ATM gives him $300
and then says $0 balance. Rachel had withdrawn the other $5,000,
presumably to hire her attorney.

How might this mess be dealt with by the Rhode Island Divorce Court?

Fred
didn't tell Rachel about the equity loan. Is Rachel likely to be held
responsible for the equity loan given that circumstance?

Fred
pledged Rachel's jewelry and fur coats as collateral against the equity
loan. In the divorce proceeding could Rachel get them back from Focus
One Financial without paying off the equity loan?

Rachel
used up virtually every dime of the equity loan money. Even if Rachel
didn't know where the monies came from, might she be held responsible
for the loan as well since she received the benefit of the monies?

Is
the Equity Loan a marital debt such that the Rhode Island Family Court
has the power to determine its apportionment and assignment, or does
Fred's conduct in deceiving Rachel render this his own private debt?

There are three (3) other issues (Questions) in this case that you should spot. Can you see them?

CALL (401) 354-2369 now to schedule for your low-cost, no obligation legal consultation!

NOTE: The postings on this website are NOT legal advice, DO NOT create an attorney/client relationship and are NOT a substitute for a detailed consultation with an attorney experienced in the state where you have your legal issue. This site is based on Rhode Island and is presented for the convenience of the internet public.

* The Rhode Island Supreme Court licenses all lawyers in the general practice of law and has no procedure for recognition of specialty in any area of law.

Friday, March 21, 2008

Paying for your Rhode Island Divorce Atttorney doesn't come cheap
depending upon who you hire. Many people feel trapped and unable to
file for divorce or defend against their spouse's claims simply because they don't have the monies to hire a
decent Rhode Island Family Attorney.

However, if you have a credit card, whether it is in your own name
or jointly held with your spouse, that credit card can be used to hire
the lawyer.

Now most people might worry because all they believe they are doing
is increasing their debt. However, there are a few considerations that
may outweigh the use of a credit card to pay for the attorney who will
represent your rights.

First, if you don't hire the divorce lawyer, might you take a greater loss
on your rights than the amount you are putting on the credit card.
Second, if your spouse has a lawyer or even if he doesn't, isn't it
reasonable to claim that the hiring of the attorney was a necessary
expense to help the marriage come to its conclusion fairly and
equitably? Both issues are more than reasonable and it is an entirely
valid argument to make to the court that the charge for your attorney
was reasonable and necessary and therefore it is a marital debt just
like any other. This is especially true if your spouse was the party
filing for the divorce.

If you need to hire an attorney for your divorce and your only recourse
is a credit card, it is probably your best bet to use the card, protect
your rights and hire a decent family law attorney.

CALL (401) 354-2369 now to schedule for your low-cost, no obligation legal consultation!

NOTE: The postings on this website are NOT legal advice, DO NOT create an attorney/client relationship and are NOT a substitute for a detailed consultation with an attorney experienced in the state where you have your legal issue. This site is based on Rhode Island and is presented for the convenience of the internet public.

* The Rhode Island Supreme Court licenses all lawyers in the general practice of law and has no procedure for recognition of specialty in any area of law.

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* The Rhode Island Supreme Court licenses all lawyers in the general practice of law. The court does not license or certify any lawyer as an expert or specialist in any field of practice.